Blog Archives

Starting a Janitorial Business

(Originally published on August 28, 2011; reprints previous original material published in this section)

A janitorial services business has excellent potential and needs little capital to start. There are janitorial companies that have started small and are now deploying hundreds and thousands of workers because more companies now turn to agencies to handle their  sanitation requirements. Not only do they find it cheaper, but the manpower are usually better trained.

To get into the janitorial services business, here is a list of the basic steps:

1. Undergo training. Learn how to properly conduct janitorial services. Unless you will be hiring a supervisor or manager, you will have to be the one to teach your janitors. Learn how to minimize your supplies usage as well as maintain housekeeping work standards. You also need to know the legal standards and safety measures to avoid accidents and health hazards.

2. Select a location for your office. Go for the most affordable site since office location is not important in this business. In fact, you could start first by being home-based to save on rentals.

3. Come up with a descriptive business name and register with the appropriate agencies: Department of Trade and Industry (DTI) for single proprietor; and with the Securities

and Exchange Commission (SEC) for corporations or partnerships.

4. Get a barangay clearance and then proceed to the municipal or city hall to get your business permit.

5. Register with the Bureau of Internal Revenue and get your TIN, Certificate of Registration, and obtain authority to print receipts.

6. Register with the Social Security System, Philhealth, Pagibig Fund and the Department of Labor.

7. Open a bank account for your business.

8. Hire qualified manpower and train them to properly conform to you and your client’s standards. They must be well-trained before deployed to a client.

9. Develop an efficient payroll system for your personnel.

10. Purchase the appropriate equipment and supplies. Some of the pricier equipment you must have are floor polishers, vacuum cleaners, pressure washers and power scrubbing machines.

11. Pick the most appropriate marketing strategy. If you are a startup, network to gain potential clients or to scout for establishments that may need your janitorial service. You

can also post your services on free ads websites since many people now use the internet to look for janitorial services. This is cost-effective for those with limited capital. Those with more resources should advertise in newspapers and/or the yellow pages.

12. Be able to cost and price your services properly. While labor costs will be the bulk of your expenses, cleaning supplies, equipment  depreciation and office overhead must be taken into account.

The janitorial services business is not glamorous, but due to necessity, lesser competition and simplicity, it is a solid business with a reliable cash flow. For people with limited capital and who are not afraid to work hard, this is indeed a promising venture.

Want to learn more about this business? BusinessCoach, Inc., a leading business seminar provider, conducts seminars on “How to Start a Janitorial Business.” Contact (2) 727-5628/8860 or visit http://www.businesscoachphil.com for details.

 

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Business Coach: How to Get Good Employees

(Originally published on August 28, 2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

Good employees are the foundation of any company’s success. However, most small to medium-scale enterprises have no HR department to do the hiring process that getting suitable personnel is seldom done in a professional manner. Making things more difficult is that the most qualified candidates naturally gravitate to larger companies because of higher offers and perceived job security.

Because entrepreneurs tend to be hands-on when it comes to all aspects of the business, they cannot hope to match the sophistication of the HR specialists in larger firms. Still, having a prepared procedure based on best practices will go a long way in improving your recruitment process.

Below are some of the most important things to do when you are hiring:

1. Have a list of the qualities necessary or desirable for the position. This will enable you to better judge the suitability of a job seeker. You could also supplement this with a negative list that shows characteristics that are absolutely banned from your workplace.

2. Interview enough applicants to select from. If you only have few choices, there is a strong tendency to just pick the bad from the worse, so I would suggest that you interview at least 20 applicants to have a better chance of getting an ideal candidate. To get a sufficient number of competent applicants, it may be necessary to spend a substantial amount on advertising for the position. This is one expense that will pay off in the long run.

3. Have an application form. Even if job seekers will be bringing their own resume, it is important that you have them complete an application form when they arrive. Customize your application form according to the position. Note that job seekers’ resumes contain what they want you to see, while your application form will bring out what you want to see.

4. Have plenty of space to indicate employment history in the application form. It is crucial to have the most complete employment record possible, so design your application form in such a way that there would be no reason not to include the applicant’s entire employment history.

5. Check gaps in employment records. It is important to know the reasons for an extended period of unemployment between jobs. There is a possibility that the gap was due to the non-inclusion of a job where the departure was due to a termination, or where the company is likely to give poor feedback. If the gap was attributed to a stint abroad, request to see the job seeker’s passport as proof.

6. Demand the necessary clearances. It is standard operating procedure to at least ask for a current NBI and employer clearance. Still, there are some small companies that neglect to check even the most elementary documents.

7. Allot sufficient time to do a thorough interview. Depending on the position, a proper interview should last from ten minutes to half an hour, at the very least. Rushing the questions will not allow the job seeker enough time to answer thoroughly. You would also be missing opportunities to better assess the suitability of the candidate.

8. Have prepared tests. Design or obtain tests that would measure the capacity of the applicant to do the job. These may be general tests like IQ tests or they may be more specific, like seeing if the applicant can operate a particular machine effectively.

9. Check on previous employers. One of the best ways to know if a prospective employee is truly suitable is by calling on previous employers. Inquire not only on his work proficiency but also regarding his personal attitude.

10. Require a physical checkup. Since it is very inconvenient and costly, one of the last but necessary things to do is to require the applicant to undergo a physical check-up.

This is very important because no company wants to be hindered by an employee that is always absent due to poor health. It may also be that the applicant is suffering from a highly contagious disease.

 

Despite all the pessimism, there are plenty of good employees in the market that are a fine fit for your operations. It just takes a little more effort and preparation to see a dramatic improvement in your hiring. This will give your company’s operations a big boost since having qualified employees in your company will enable higher levels of productivity and fewer headaches.

 

Business and management consultant Ruben Anlacan, Jr. is the president of  BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small- or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

 

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Setting an Apartment Rental Business

(Originally published on August 21,  2011; reprints previous original material published in this section)

For those looking for a steady source of income with minimal time to spend, an apartment rental business is hard to beat. You may have heard a lot of horror stories about problem tenants, but notice that most landlords will never sell their apartments.

The truth is a lot of retirees depend on the monthly rental payments for their everyday expenses. Despite everything, apartments normally do not go bankrupt like many small businesses. That is why they are a favorite investment for people who want minimal risk.

However, there is a downside to the safety of this business. The lesser risk comes at the price of lower returns. It will take a relatively long time to get back your investment compared to other ventures. The cash flow, while steady, is small in comparison to the size of the investment.

You must also be updated with current rental laws. The rules on how much you can increase rentals and the ejectment procedures constantly change, so you must be abreast.

Be very selective in screening tenants. Reject those who have a strong chance of not paying their obligations. Do not allow those who will likely cause too much wear and tear on your apartment, as well.

Your lease agreement must be carefully drafted. It would be best to have one drafted by an attorney with experience in making lease contracts. Buying a ready-made document from a store may not only result in an unfavorable agreement, but your tenants will have a lesser view of the agreement.

The registration requirements for an apartment rental business are simple. Assuming that you will be constructing your own, here are the basic steps:

1. Check first if the property you have or plan to acquire is zoned for the construction of a residential apartment. Know, too, about restrictions like the maximum number of floors you can build. These restrictions may possibly make your investment not feasible.

2. Register with the Department of Trade if you will be the sole owner of the property or with the Securities and Exchange Commission if you plan to be a corporation. Have your accountant or lawyer prepare the needed papers.

3. Get a Barangay Clearance.

4. Obtain a Building Permit and Occupation Permit from the municipal or city hall. You must also secure your Fire Safety Permit there.

5.Register with the Bureau of Internal Revenue (BIR). Get your certificate of registration. This will contain the schedule of your tax obligations with the national government. If you still do not have a Tax Identification Number, obtain it at the BIR along with your authority to print official receipts.

6. Have your receipts printed. Starting an apartment is a sound investment, but you must know what you are doing to avoid mistakes. Since apartments require a substantial capital, and laws and trends change fast, it would be prudent to know more about this venture before proceeding.

 

BusinessCoach, Inc., a leading business seminar provider, conducts seminars on starting an Apartment or Commercial Stall Rentals Business. Contact them at (2) 727-5628/8860 or e-mail businesscoachphil@gmail.com for details.

 

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Business Coach: The Seven Common Pricing Mistakes

(Originally published on August 21,  2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

Of all the components of the marketing mix, pricing is the most neglected. This is a common mistake made by entrepreneurs because despite everything, price is the primary determinant of sales and profits. To a large extent, your company’s strategy and physical appearance are affected by your pricing decisions.

The truth is, figuring the best price to sell your product or service is no simple task. In fact, many books have been written on this topic alone. To be able to offer useful advice, I am constrained to limit our discussion only to the worst pricing bloopers usually committed by entrepreneurs:

1. Adopting the going rate. The majority of businessmen choose this option because it is considered a safe choice. Going with the general market price, many think, is a great short cut because your competitors are unlikely to sell at a loss. However, this is not always the case. It is possible that they are able to obtain supplies at a far lower cost and you may suffer a loss if you copy their price. On the other hand, there may be compelling reasons why you should price higher; your quality and service may be superior and a premium price is justified.

2. Neglecting to cost in your overhead. You must be able to recover not only the materials you bought, but also cover expenses like rental, depreciation and labor costs. Going through all the expenses that make up your total cost with an accountant is time and money well spent.

3. Engaging in a price war. Rarely is this a wise choice for an entrepreneur, as everyone loses in a price war. You must have a lot of reserve capital to sustain this strategy, and most of the time it is not the ideal course. In case you find yourself being attacked by a price- cutting competitor, a better strategy is to differentiate your product or to launch a lower cost brand.

4. Refusing to lower prices when necessary. There are times when you need to lower the price even below cost in order to make the item move. But many would not sell below their cost, preferring to wait for months or years to dispose of the item. This results in capital being tied unproductively, besides incurring storage costs. Another bad side effect of this is that your customers will not like being offered shop-worn and passé items.

5. Forgetting to factor in taxes. There are taxes that must be paid, and you must take them into account when setting your price. The most important tax to consider is the value added tax or VAT, because unless you are VAT-exempt, this must be paid even if you do not make a profit.

6. Applying the same markup across all items. If you carry a lot of inventory, you must take the time to study the best markup for each item. One tip I can give you is to price competitively on popular, fast-moving items. I know some retailers that have a reputation for low prices, when in fact they are low on only a handful of popular items.

7. Neglecting to continuously monitor market prices. While I advised not blindly copying the going market rates, ignoring it is a worse blunder. You must always be vigilant in checking the prices of competitors. Having this knowledge early will give you more time to plan how to react before too much damage on your sales is done.

Pricing is the most potent variable in marketing that you can easily control. The pricing policy you adopt can make or break your business. As you realize its importance, it will be wise to ponder your current pricing strategy.

 

Business and management consultant Ruben Anlacan, Jr. is the president of  BusinessCoach, Inc. and a resource speaker for various business topics. He

discusses overviews and tips for business from the point of view of a small- or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

 

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Business Coach: Surviving Your Business, Surviving Marriage

(Originally published on August 14,  2011; reprints previous original material published in this section)

 

Can Husbands and Wives Run a Successful Business?

 

By Ruben Anlacan Jr.

Most couples dream of having a business together. Being in love, and believing in “for richer, and for poorer,” it sure seems a good decision for couples to be working together in the same business. Unfortunately, this is not always true.

A husband and wife together in the same business can bring chaos in the workplace. It is almost always inevitable to bring personal problems in the company, and vice-versa. In fact, I know some employers who would not even employ couples in their company.

Their personal problems become the issues of their bosses.

After getting married, my wife and I immediately started a business. It was not easy the first time because we brought work home. We debated on work-related issues over breakfast, lunch, and even dinner. Yes, we went to coffee shops during weekends, but still we talked about business while sipping coffee. It was a nightmare!

Also, at first, we decided to bring home just some paperwork. But later on we brought almost half our jobs home so we could work on it overtime. Our bedroom consisted of two worktables, computers, printers, telephone lines, broadband Internet connection, and tons of paper.

Working together, we faced a lot of struggles. It was difficult because you cannot terminate your spouse when he or she doesn’t meet your expectations!

Employees’ Problem, too

It was also difficult with our employees, as they have to decide between “He Says, She Says”, or face the consequences. A few Machiavellian employees sometimes played us against each other to their advantage.

I thought that always being together would allow us to share more good times, but that was far from what happened. Since both of us had key roles in the company, it was virtually impossible to take vacations without worrying.

It is not as easy as it looks, but we survived. Let me share how we did it:

• Know your strengths. This is so you can divide your work, and prevent tasks from overlapping. This also brings a clear understanding on who’s in charge of what. Designate positions to minimize confusion and clarify who is responsible for a task.

• Make it clear who makes the final decision. Decide on who is “The Real Boss.” Despite all the talk about equality, there comes a time when a major decision must be made.  When there is a tie, then one of you must have the authority to make the final decision.

• Respect each other. Even if you have opposing views, speak calmly and listen well. When you disagree, refrain from attacking each other on a personal level. On the other hand, you can also use this opportunity—as my wife and I did—to learn not to be sensitive to criticism.

• Separate personal from business finances. Be clear about money matters. Even if you are a co-owner of the business, discuss expenses with your spouse. Refrain from just getting money from the cash register, or issuing checks without the knowledge of your partner. Separate your business from your personal bank account.

• Be honest about your limitations. If you believe you are having difficulty with your responsibilities, admit it to your partner. Explain that your qualifications do not jive with your current work situations, if that is the case.

• Have quality time for each other. Do things apart from work. Allot time together for hobbies, and don’t forget about family. Just because you are always together doesn’t mean that you no longer need to have time for things other than business.

• Celebrate successes. Give importance to each other’s contribution by celebrating achievements. Never take things for granted. Even if you are together 24/7, treat each other for every milestone in your business.

My final piece of advice: if you don’t have a strong relationship with your spouse, don’t go into business together, especially if both of you have dominant personalities. It is not simple, and will just weigh down the marriage if you are already prone to arguing with each other. But if you love and treat each other with respect, I’m sure you’re both going to make it just fine. Good luck!

 

Business and management consultant Ruben Anlacan, Jr. is the president of  BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small- or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

 

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Business Coach: Answering the Call to Transfer

(Originally published on August 7,  2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

I received an e-mail from a reader recently. She wanted to know if it was okay to look for another job while still employed. She wanted to transfer to a company in the same industry that offers a higher pay. Compounding her problem is that she is currently in a dispute with her employer.

This is a common scenario in the corporate world. Anyone in the same situation would probably feel aggrieved, but it’s best not to let your emotions rule your decision. Many people planning to look for another employer share the same problem. Many of them have done it well and are now enjoying a better job. However, there are those that made the wrong moves and are presently in a worse position than before.

The situation must be carefully studied before deciding on a course of action, since a wrong move may do enormous damage to your career.

There are many aspects to consider; among these are the legal, ethical and practical consequences.

Think first of your legal standing. The first thing that you must do is to review all the employment related papers you have signed with your company. There might be a non-compete clause in your employment contract. This forbids you from seeking employment from a company in the same type of business.

If there is a non-compete clause, you should consult a lawyer with extensive experience in labor cases if you are still determined to transfer to a company in the same industry. I suggest you try to work out something mutually acceptable.

If you want to be tough, you may be able to win your case in court but that will entail much time and money if the company decides to give you trouble. Besides, there is always the possibility that you may lose your case.

An other potential legal impediment is if it states in your contract that you are required to be employed a minimum number of years by the company; this is usually the case if you were given special training. This was an issue some time ago when several pilots resigned to work for another airline. Their previous employer sued them because they have not yet completed the required number of years as compensation for their training.

Study all the practical implications of your resignation. What are the benefits that will be foregone? There may be loans that will be immediately deducted from your separation pay. Check the terms of your Pag-ibig and SSS loans, if you have outstanding balances that may automatically be due in full. You may be counting on your separation pay to tide you over while unemployed, without knowing that it may be significantly reduced.

Take note that no matter what your personal opinion is of your present company, now is not the time to burn bridges. It is virtually certain that interviewers will check on your current employer and if you are not in good terms with them, they are unlikely to give a good recommendation. In fact just around a year ago, I was interviewing an applicant who was out of work for two years. She was highly talented, and she did not know that the probable reason why no one was hiring was because one of her references gave her a terrible feedback.

Although you are likely to be interviewed by a fellow employee, sympathetic to your cause. Never badmouth your previous employer. Since there is an abundance of applicants to choose from, it will most likely eliminate you from consideration if there is the slightest possibility that you are a troublemaker.

Regarding the ethical aspects, I do not see any problem applying before filing your resignation—unless you are using company time and resources in your job search. As long as there is no malice in any of your acts, like intentionally filing your resignation at a time when it will cause the most inconvenience, then the thirty days’ notice should be sufficient for both legal and ethical considerations.

The main problem with looking for work before filing your resignation is that prospective employers cannot call on your current employer to check on your performance.

Hopefully your credentials will outweigh this disadvantage.

Finally, be extra nice on your last days in your company. Instead of slacking off, exert more effort and try to make the transition for your successor as easy as possible. Just

as the first impression has a long impact, so are your last actions long remembered; so try to leave on a high note. A cordial exit may reap future benefits later in your career

Business and management consultant Ruben Anlacan, Jr. is the president of  BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small- or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Business Coach: Insights on Retail Location Hunting

(Originally published on July 31, 2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

I recently wrote an article (archived at http://www.businesscoachphil.com/finding-the-bestlocation-for-your-retail-business) on how to look for a good retail location, but due to space constraints there were many vital considerations that were not discussed.

For the benefit of those who want to know more about choosing a retail location, we will go deeper into the other factors:

• Know what type of goods you are selling. While location is a vital element in any retail establishment, its degree of importance depends on the type of goods sold. Convenience items like groceries need to be very accessible since buyers are unlikely to travel far to buy these type of goods. On the other hand, “shopping” type of goods like clothing and furniture are usually canvassed and compared so people may spend more time and effort looking for the items.

• Pick the far corner lot. We all know that a corner lot is more desirable than an inside lot because it is more visible and has more frontage, but since there are four corners in an intersection you must know which corner is the most desirable. Generally, it is the corner to the right after crossing the intersection that is more attractive. This concept is crucial to apply if your store is relying on vehicular traffic for a significant portion of your sales.

• Know what the past tenant was paying. Even if you know the going rental rate for a location, it is a good idea to find out what the former tenant was paying. If it turns out that the last tenant was paying far below the going rate, you could use that fact in negotiating for your rental. It would not hurt your bargaining position and you may get lucky especially if the landlord is in a hurry to have the place rented.

• Know if the franchisor wants to get the site for himself/herself. If after submitting your proposed site to a franchisor you receive rejection in a couple of days, then you must worry if the franchisor is after your site. It is highly unlikely that the franchisor had already properly assessed your site in the span of two days.

• The role of frontage. All retails stores will benefit from a larger frontage, but a counter type operation will need a bigger frontage than a self-service operation. In a counter type retail store, it is more advantageous to double the frontage than to double the store area.

• Store size in itself is a traffic magnet. Consumers believe that the larger the store the better assortment it has and the more reliable it is. We learned this the hard way when we drastically reduced the floor area of a drugstore branch to save on rental. However, after one year, while we did not reduce our inventory, sales fell by almost half.

• Study census data. This information can be gathered from the National Statistics Office (NSO). Find out the population, income and other data in your location that may help you have a better idea of your market.

• Use Google Maps. This is a website by Google wherein you can get an actual satellite view of your site. Previously, only large companies could get an aerial view by hiring a helicopter or plane. Much of what they obtained at a prohibitive cost then you can now get for free. There are so many things you can learn from studying your potential location in Google maps. You can see both customer generators, obstacles and other useful data that you may miss on foot.

• Check if there are zoning problems. Do not be complacent just because the previous tenant or owner of the site was able to operate the same business, they may have clout with the local authorities or their operation was tolerated because it has been there for a long time.

• Factor in the cost of renovation. Often you will find a location that seems amazingly cheap, but it is just an unfinished shell. The cost of fixing and furnishing the place may greatly exceed the savings from the lower rent. Furthermore, there may be some specifications (like the need to use tempered glass) that you must comply with that will jack up your projected budget.

• Walk around the property in all the different locations. Allocate several days to walking around your prospective site. This will allow you to have a better feel for the place and you will learn many things that will not show up in a market research report.

• Ask people that may be in position to know about the site. Be resourceful and interview suppliers of the past tenant. Strike a conversation with people who see the place everyday, like the sales clerks in the adjoining store, and ask about the number of people patronizing the place. One very successful food entrepreneur even interviewed a garbage collector of a restaurant to gauge how strong their sales were!

• Make sure you are signing up with the owner of the site or his/her authorized representative. Ask around the neighborhood to verify ownership. You can even check with the register of deeds in city hall to confirm that you are dealing with the right party.

Do not be too shy to ask for the proper identification since you will be giving out a substantial amount of money.

Location is the most important decision in most retails stores because reversing a mistake is extremely costly or impossible. Spending more time and effort to choose the best location must not be considered an expense, but instead view it as an investment with a very high rate of return.

 

Business and management consultant Ruben Anlacan, Jr. is the president of BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Business Coach: Best Way to Motivate People

(Originally published on July 17,  2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

Motivating people is a primary concern of business owners and managers. Whether the enterprise is a small retail store or a billion-dollar multinational, what will make the crucial difference is the people running the daily operations. But even with this basic rule of thumb, many managers keep making the same blunders in their approach.

The reasons for lack of motivation stem from countless sources, and this is what makes it so challenging. Since there are a number of causes for low morale, there should be a corresponding variety of solutions. However, managers tend to rely on a limited repertoire of responses that are often inappropriate for the problems. Below are some ideas that may serve to help improve your motivation efforts:

• Foreign fads and formulas rarely work unless modified. There is a strong tendency for managers to read the latest so-called solutions, immediately believing that it is the panacea to all their motivational problems. This is seldom the case, and usually the expense and disturbance it causes far outweighs the benefits. Every system must be adapted to your particular situation and extra care must be taken for it to fit our local culture.

• Motivational talks only have a short-term value. If you are the type of manager who believes the sole way to motivate workers is to have a pep talk from time to time, then mend your ways. This technique must be combined with more lasting measures to provide a complete solution; although in critical situations this is very useful.

• Some motivators may no longer be effective. What motivates people changes over time. A bonus of P1,000 may have thrilled employees years ago, but it takes several times that amount to get the same level of enthusiasm now. Get regular feedback from employees to gauge past programs.

• Consider that people have varying motivators. I know of a pharmaceutical company that had a poll among its hundreds of employees on where to spend their multimillion peso budgeted Christmas party. The result was a wide variety of preferences. Some wanted to give it to charity; others wanted it given as a cash bonus; and there were the traditionalists who wanted to spend it all on the Christmas party. The lesson here is that you must not assume that everyone wants the same thing. Prior consultation with employees before implementation would prevent gross blunders.

• Know how to properly use cash as a motivator. Cash is the most potent motivator—given enough cash, most people would do anything you ask. However, it has its limits. There is a point where it is no longer cost-effective. Know how to properly utilize the two types of cash compensation:

• Fixed compensation. This is the most important motivator for people to accept the job, but it is not an effective incentive to improve performance in the long term. You may be offering a higher than average compensation, but this is soon taken for granted. Nevertheless the level of fixed pay is important to attract talent. You must be willing to give at least the industry going rate in order to hire qualified personnel.

• Variable compensation. When you associate the amount of pay to performance like sales targets, a strong motivation kicks in. This method is most effective in functions where the outputs are easily measured, like in sales jobs. However, this is very difficult to apply in situations where the output is not easily measured or attributed. For example, a manager may be able to show an increase in profits by cutting corners, like sacrificing quality or postponing maintenance work. These managers hope that by the time the effects of these poor policies become evident, they will probably be in another position.

• The values of benefits are relative to what others are getting. Monitor what other companies are giving to their employees because, fair or not, there will be comparisons. A P10,000 bonus may seem generous, but if a similar-sized company in your industry is giving P20,000, then you cannot expect a cheerful reaction.

• The most cost-effective motivator is to give people more opportunities to make use of their abilities and to grow professionally. Providing a way for people to exercise more of their talents builds feelings of self-esteem and may even save on costs. This also encourages further improvement of their skills. A program to develop the delegation skills of managers will boost efforts to bring this about.

Motivate people will always be one of the core issues of managers and entrepreneurs. There will be no final book on this topic because by the time the book is written, the best companies have moved on to fresher ways to drive the enthusiasm of their workforce. The best way to inspire your people is to constantly be on the lookout for the best ways to motivating your workforce.

 

Business and management consultant Ruben Anlacan, Jr. is the president of  BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small- or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

 

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

Beginner’s Guide to Project Management

(Originally published on Wednesday, July 10, 2011; reprints previous original material published in this section)

How a major project is handled can either make or break a person’s career—and even his company’s fortune. Unfortunately, many of those new to project management are left to “sink or swim” with insufficient guidance. While in developed nations many people engage in formal training in project management, here in thePhilippinesvirtually all project managers learn about project management on the job.

To be able to grasp the essentials of project management, you must know its definition: a project is a temporary undertaking with a defined beginning and an ending, done to meet unique objectives. Its transient nature means projects are not part of operations that are repetitive work to produce products or services.

While reading this article will not make you an instant expert, the basic ideas of project management listed below would be very helpful in guiding the beginner:

• Clarify the project objectives and requirements. You must document precisely what the project seeks to attain, as well as its constraints. Establish the deadline for completion, the budget, and the quality standards. You must consult with all the departments or persons that will be affected or needed to complete the project. Things like possible legal impediments must be ironed out. A lot of brainstorming and negotiation occurs in this stage. Getting the support of internal and external stakeholders is also important for a project’s success.

• Create the project plan supported by using the appropriate planning tools. Before beginning, you must create a detailed plan. Get detailed cost estimates and setup milestones to monitor progress. Tasks must be arranged in the proper order and the dependencies (a task that must be finished before another task is done) noted. In doing this, it is impossible to organize a project properly without the use of planning tools. There are dozens of possible tools, but there are some that are commonly used. One is the Gantt chart, a type of bar chart that illustrates a project schedule. For better control, the more sophisticated tools often used is the Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT); these enable you to apply additional resources to relieve bottle necks that delay the whole project.

• Prepare for contingencies. Plan for problems that may be encountered. Build on some slack into your time schedule in order to mitigate the inevitable delays that will result from unforeseen events. Besides the extra time needed, you must also have some allowance in the budget for emergencies that will need additional expenditures.

• Submit timely and well written Project Status Reports. Study how to make project status reports for your superiors. Find out if there is already a prescribed format or precedent before coming up with your own. Reports should be as short as possible without missing important details. Avoid using jargon that may not be understandable to all those who may read your reports. Report if progress is on schedule and being done within the budget. Also, keep copies of your report for future reference.

Effective project management is extremely important and you must try to learn as much as possible to avoid costly mistakes.

To learn more about this important function you may call (2) 727-5628/8860 or e-mail businesscoachphil@gmail.com for details.

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Business Coach: Applying the Broken Windows Effect

Small Things Can Make a Big Difference

(Originally published on Wednesday, July 10, 2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

We often hear that it takes money to make money. This actually means that it takes big money to make big money! Only when we have unlimited resources do we think it possible to achieve great things; but very few companies or individuals are actually that way. Because of a lack of funds, you may feel helpless to make a significant change.

If you are a manager or an entrepreneur on a shoe string budget and want to hatch a project that would make a big difference, what should you do? Fortunately there are things that accomplish results far beyond the proportion to their cost. One such strategy is an idea I recently discovered that could be applied to this problem: the “broken windows effect.”

Essentially what the “broken windows effect” says is that tolerating minor violations set the stage for committing graver offences. The example cited the case of broken windows caused by vandalism in run-down crime-prone neighborhoods being a precedent to worse crimes. What’s interesting about this idea is that in many studies, it was shown that tamping out the minor violations (like the broken windows) also decreased the major problems.

In the business setting, there are numerous cases where the principle of the broken windows effect can be effectively applied. This positive effect does not only include disciplinary matters but other acts that affect productivity or your company’s image. The possibilities are endless; but here are a few to stimulate your thinking:

• Crack down on personal use of office supplies. This may seem petty to some but small things do add up and those who are lenient may soon find out that larger items are missing. Monitor office supplies usage diligently. This will not make you popular, but better this than creating a culture of dishonesty.

• Fix broken equipment as soon as there is a problem. Promptness in repairing faulty equipment will send a strong signal that you want everything to be in good working order. Performing maintenance on the scheduled time is also part of this task. Allowing the continued use of a machine as long as it can still operate is a dangerous practice. A machine in good condition is capable of more output and at a better quality.

• Repair broken signage, cracked counters, vandalized walls, and other items visible to the customer ASAP. These are urgent concerns because these have an immediate effect on your company’s image. Customers will automatically think that your neglect of how your business looks also applies to the quality of your operations.

• Do not tolerate disrespectfulness toward customers. While customers are not always right, there are ways of handling an unreasonable client civilly within the bounds of proper behavior, and there are actions that cannot be allowed. Consistently impressing upon your frontliners that they cannot treat customers poorly will radically improve customer service.

• Be strict with tardiness, long breaks and other time wasters. The long term effects of a lax policy on lateness are worse than most would think. If left unchecked, there will come a time when hardly anyone would bother to be on time. Long breaks and other similar misuse of working hours also have the same tendency to worsen when unchecked. However, it is sometimes not sufficient to just penalize these time wasters. There may be deeper reasons besides slack implementation since consistent tardiness or time wasting is often a sign of lack of motivation. You must also tackle other causes if this is the case.

• Recycle whenever possible. There are many things you can recycle, especially usable paper. If people see that the company is serious in fighting wastage, then you will help develop a mindset that encourages savings. Besides the profit motive, your company will also be doing its share as a socially responsible enterprise.

Lack of resources must not prevent you from maximizing the means that you already have. Small things can indeed cause large changes. Just like repairing broken windows as soon as possible, the resulting benefits of such small efforts may well exceed your wildest expectations.

Business and management consultant Ruben Anlacan, Jr. is the president of BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small- or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit http://entrepcoach.blogspot.com or e-mail entrepcoach@gmail.com.

All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)

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